Insight
Permian inventory gaps: a creative way to contemplate consolidation
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Lower 48 M&A activity has ramped up with a vengeance. Investors are pushing for profitability and cash flow, and producers are responding by combining portfolios to scale-up low cost inventory, capture more efficiencies, and stop margin leakage. Recent deals prove that buyers are willing to pay so it's logical to contemplate the next set of deals and model what further consolidation could mean for supply. A changing operator landscape impacts how Permian assets get developed. Could it bring barrels forward, or flatten the growth profile? The race to build bigger footprints with high-quality inventory is the key driver of deal flow. These are quantifiable metrics that can be modelled. Poor inventory means growth will be more expensive and strong inventory makes acreage desirable for onlookers. In this paper, we set out to advance the thinking around this complex issue. What makes an operator a likely acquisition target and which companies need more top-tier inventory to sustain growth?
Table of contents
- Executive summary
- Running faster and faster, only to stay in the same place
- Consolidation: smart for buyers, smarter for sellers
- Remaining inventory is the leading indicator
- Messages around potential consolidation
- Implications of consolidation
- Final takeaways
Tables and charts
This report includes the following images and tables:
-
Illustrating the treadmill effect of tight oilWolfcamp and Bone Spring breakevens and remaining resource estimates by top operator
-
Benchmarking depth and quality of remaining Wolfcamp and Bone Spring inventoryImpact of hypothetical consolidation on Permian growthBreakdown of Wolfcamp and Bone Spring supply growth by operator type and impact of consolidation
What's included
This report contains:
